Question

Discuss a current event involving either a government or not-for-profit entity involving a problem with financial performance, fraud, waste, or abuse. Explain the event or situation, and any lessons learned, or recommendations you may have for risk avoidance.

Answer 1

Non-profit organisations, because they may not have powerful controls in place, may be targeted by inner and external thieves. Some non-profit organizations also hesitate to report theft due to a worry that their reputations might be damaged, resulting in fewer donations.

Non-profit fraud is frequently perpetrated by individuals in trusted authority roles such as managers or accountants. However, as the following case shows, fraud can also be perpetrated by lower-level staff.

Case Study- Bookkeeper steals $800,000 that was meant for veterans

A 54-year-old Connecticut female named Deirdre M. Daly allegedly stole $800,000 from the National Veterans Services Fund, a non-profit organisation providing social and medical assistance to Vietnam and Persian Gulf War veterans and their relatives. Daly was working at the organisation as a bookkeeper. She diverted $800,000 from the organization over a five-year period from 2009 to 2014 to pay for her own needs and made fraudulent entries into the books of the organization to cover her tracks. She has been sued by the United States in federal court. Justice Department and federal prison sentence of two years followed by three years of parole. She was also instructed to pay complete compensation

Non-profits should enforce powerful accounting procedures, including software, audits of surprises, and periodic reconciliations. It is better for non-profits to use credit cards instead of money or checks to qualify for loan. This can assist to more easily track purchases by reducing instances of non-profit fraud. Non-profit organisations with insufficient loan history to secure credit cards may want to use non-profit debit cards as they have powerful inner controls.

Non-profits can limit the cards’ use to specific transactions and set limits on the cards by the day, week or month. They can also view the cards’ transaction histories at any time from their secure dashboards and turn off an individual card immediately if they see misuse.